Massive update of export regs starts to take effect

Since the 1960s, rules have required companies to apply for federal permission to export any of tens of thousands of items that are on federal control lists. Critics have long complained that the system needlessly protects nuts, bolts and other seemingly harmless items once added to the list because they could used to build weapons.

President Obama announced the reform effort in the first year of his presidency, and the State and Commerce departments in Aprilbegan issuing thousands of pages of regulations meant to streamline the export process for 19 categories of materials.

The initiative involves transferring thousands of less significant military items that don’t warrant the tight controls of the State Department’s U.S. Munitions List to a more flexible list at the Commerce Department.

Eventually, the two lists would be merged and overseen by a new export control agency charged with licensing exports and enforcing the new regulations.

The regulations taking effect this week reflect two categories of exports: technology used in military aircraft and military aircraft engines. Licensed exports of the two categories amount to $21 billion a year, according to the aerospace trade group. That total could increase, as many items are moved to the less restrictive list.

“Completing the revisions to the USML and moving forward with further licensing caseload management reforms are critical to sustain and grow the global competitiveness of the U.S. defense industrial base,” the AIA said.